Nvidia 2023 1Q Blowout Earning

- 2 minutes read - 386 words

Today Nvidia reported its 2024 first quarter result. Although investors have expected a very good quarter (maybe next as well) due to its AI business, the result is still far exceeding their expectation. The average expected earning-per-share (EPS) is 0.92, but the announced EPS is 1.09, 18% above the expectation. The stock price shot up over 20% in the after-market trading session. Nvidia is the global leader in providing the GPUs for the AI business, which is driven by the revolution of the generative AI from OpenAI.

Let’s take a look at what Nvidia senior management says during the investor call. Here is the summary of the call:

  1. NVIDIA saw record data center revenue in Q1, driven by strong demand for its accelerated computing platforms for generative AI and large language models. This demand was broad-based across cloud service providers, internet companies, and enterprises.

  2. NVIDIA has procured substantially higher supply for the second half of the year to meet the surging customer demand. The company expects data center revenue to continue growing sequentially in Q2 and beyond.

  3. Generative AI is driving a step-function increase in inference workloads, which require NVIDIA’s accelerated inference platforms. NVIDIA launched several new inference products at GTC to address this opportunity.

  4. NVIDIA’s software stacks like AI Foundation, AI Enterprise, and Omniverse are key to extending AI beyond cloud providers to enterprises and industries. The company is partnering with cloud providers to offer these stacks as cloud services.

  5. NVIDIA’s networking platforms like InfiniBand and its new Ethernet solutions are essential to deliver accelerated computing at data center scale for generative AI workloads. Networking is a major focus and area of strength for NVIDIA.

  6. Products like Grace CPU Superchip and BlueField-3 SmartNIC are ramping and will enable a new generation of efficient accelerated data centers.

The data center segment, as reported by Nvidia, includes the generative AI related business, contributed about 56% of the total revenue in the first quarter. More importantly, it grew 18% over the last quarter and 14% year-over-year. That is a tremendous growth for such a mature company like Nvidia. It becomes clear that the world is gyrating toward AI. As Jensen Huang, the CEO of Nvidia, said during the call, “generative AI is becoming the primary workload of most of the world’s data centers generating information”. Think about that!